iLife - iTunes music is gone

Ok, my friend also has a mac (no really, I have a friend and he has a mac!).

He had a bunch of songs on his computer that he transferred from his old computer. After they were imported to the iTunes library, he assumed it was ok to delete the original files he copied over. This worked fine for a while, there was a copy being kept in ~/Music/iTunes/iTunes Music.

However, today he went to play some of his songs and they no longer play. An exclamation point comes up beside the file and a Error Dialog comes up and says "The original File Cannot B e Found. Would you like to locate it?" choosing yes opens a finder window.

A spotlight search doesn't return any results of the songs he lost. What could have caused this? Are all the songs now lost? We have tried (over the phone) "Repair Permissions". Anything else we can try?